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Methanex Corp. (TSE:MX)
TSX:MX
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Methanex
(TSX:MX)
Rating:71Outperform
Price Target:
C$50.00
â–²(9.65%Upside)
Positive Factors
Acquisition Impact
The acquisition of OCI’s methanol and ammonia assets in the US and Europe is anticipated to benefit Methanex by potentially increasing its EBITDA by $150-200 million.
Long-term Demand
Longer-term, new applications, particularly in the marine sector, are likely to support structurally higher methanol prices over the next few cycles.
Stock Valuation
Methanex currently trades at 38% of replacement value, suggesting a potential double in share price, at least, by the next peak.
Negative Factors
Balance Sheet Leverage
Methanex's balance sheet is likely to become more levered following the purchase of OCI’s methanol and ammonia assets.
Interest Rates and Oil Prices
Methanol demand is currently held back by high interest rates and low oil prices.
Operational Challenges
Methanex's methanol plant in Louisiana was negatively impacted by an unplanned outage.
Methanex (MX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$3.07B
Dividend Yield2.22%
Average Volume (3M)192.72K
Price to Earnings (P/E)9.8
Beta (1Y)1.46
Revenue Growth5.98%
EPS Growth39.35%
CountryCA
Employees1,415
SectorBasic Materials
Sector Strength68
IndustryChemicals
Share Statistics
EPS (TTM)1.80
Shares Outstanding67,395,210
10 Day Avg. Volume177,146
30 Day Avg. Volume192,724
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)1.28
Price to Sales (P/S)0.00
P/FCF Ratio6.75
Enterprise Value/Market Cap1.58
Enterprise Value/Revenue0.33
Enterprise Value/Gross Profit5.74
Enterprise Value/Ebitda1.64
Forecast
1Y Price Target
$61.69Price Target Upside35.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Methanex Business Overview & Revenue Model
Company DescriptionMethanex Corporation is a global leader in the production and marketing of methanol. Headquartered in Vancouver, Canada, the company operates production facilities in North America, South America, Europe, and Asia Pacific. Methanol, the core product of Methanex, is a versatile chemical used in various industries, including automotive, construction, paints, coatings, and electronics. Methanex serves a diverse customer base, ensuring the supply of methanol to key markets worldwide.
How the Company Makes MoneyMethanex makes money primarily through the production and sale of methanol. The company's revenue model is centered around its global network of production facilities and its strategic partnerships that ensure a consistent supply of methanol to meet market demand. Methanex's key revenue streams include long-term supply agreements with industrial customers, spot market sales, and distribution contracts. The company's earnings are significantly influenced by global methanol prices, production volumes, and operational efficiencies. Methanex also benefits from strategic joint ventures and logistical capabilities, allowing it to optimize supply chain operations and reduce costs, ultimately enhancing its profitability.
Methanex Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 5.56%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
Methanex's Q1 2025 performance showed strong financial results and operational recoveries, particularly in Chile and Geismar. However, challenges remain with production issues in Egypt and Geismar, decreasing methanol prices, and gas supply issues in New Zealand. The outlook includes a focus on completing the OCI acquisition and managing lower projected Q2 EBITDA.Q1-2025 Updates
Positive Updates
Strong Financial Performance in Q1 2025
Methanex reported an average realized price of $404 per ton and produced sales of approximately 1.7 million tons, generating adjusted EBITDA of $248 million and adjusted net income of $1.30 per share.
Successful Restart of Geismar 3 (G3) Plant
The G3 plant successfully restarted and has begun producing methanol, following a planned turnaround at G2 and addressing an unplanned outage at G3.
Positive Developments in Chilean Operations
Both plants in Chile have been operating at full rates, with increased production due to better reliability and removal of a technical constraint.
Stable Financial Position and Acquisition Progress
Methanex ended Q1 with $1.031 billion of cash and continued access to a $500 million undrawn revolving credit facility. The company is progressing with the OCI acquisition, expected to close in Q2 2025.
Negative Updates
Production Challenges in Egypt and Geismar
In Egypt, production was 20,000 tons lower due to gas curtailments. In Geismar, production was affected by a planned turnaround and an unplanned outage.
Decreased Methanol Pricing and Future Outlook
Methanol spot pricing in China decreased by approximately $20 per metric ton from Q1 levels. The second quarter European quarterly price decreased by €75 from the first quarter.
Gas Supply Issues in New Zealand
Methanex produced less at full capacity of one plant and faced potential power sector demands on gas supplies.
Company Guidance
In the Methanex Corporation's first quarter 2025 results conference call, the company provided guidance indicating strong operational and financial performance. Methanex achieved an average realized price of $404 per ton and produced sales of approximately 1.7 million tons, leading to an adjusted EBITDA of $248 million and adjusted net income of $1.30 per share. This performance marked an improvement from the previous quarter, driven by higher methanol prices and increased sales volumes. The company also highlighted several operational challenges, including lower production from Geismar, Trinidad, and Egypt due to various outages and gas curtailments, but noted successful restarts and improved reliability in some facilities. Methanex ended the quarter with $1.031 billion in cash and maintained access to a $500 million undrawn revolving credit facility. Looking forward, the company posted a second quarter European price of €625 per ton, reflecting a decrease from the first quarter, and forecasted a lower average realized price between $360 and $370 per ton for April and May due to lower sales and pricing adjustments. Methanex remains focused on safely operating its business, closing the OCI acquisition, achieving identified synergies, and directing free cash flow towards reducing leverage, while cautiously monitoring the impact of global tariffs and economic conditions on methanol demand.Methanex Financial Statement Overview
Summary
Methanex has strong operational margins and cash flow management, with impressive free cash flow growth and strong EBITDA margins. However, challenges include declining revenue and a need for improved net profit margins and shareholder equity.Income Statement
The company shows a consistent gross profit margin with a TTM of 22.88%, indicating stable cost control. However, the net profit margin is relatively lower at 6.02%, suggesting room for improvement in cost efficiencies or pricing strategies. Revenue has slightly declined by 0.51% from the previous year, indicating a potential challenge in market demand or competitive pressures. EBIT and EBITDA margins are strong at 13.39% and 24.51% respectively, highlighting solid operational performance.70
Positive
Balance Sheet
The company maintains a balanced debt-to-equity ratio of 1.44, suggesting moderate leverage. The return on equity (ROE) stands at 9.92%, reflecting decent profitability relative to shareholder equity. The equity ratio is at 33.74%, indicating a stable financial structure but with room for strengthening equity to asset ratio.68
Positive
Cash Flow
The free cash flow growth is impressive at 41.24%, indicating effective cash management and operational efficiency. The operating cash flow to net income ratio is 4.35, suggesting strong cash generation capability relative to accounting profits. The free cash flow to net income ratio is 3.57, underscoring robust cash flow conversion which supports potential reinvestments and debt servicing.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.70B | 3.72B | 3.72B | 4.31B | 4.41B | 2.65B | Gross Profit |
| 846.86M | 710.42M | 655.40M | 865.09M | 1.08B | 294.84M | EBIT |
| 495.67M | 361.96M | 263.57M | 610.61M | 711.97M | -32.43M | EBITDA |
| 906.86M | 798.42M | 794.81M | 1.09B | 1.17B | 334.53M | Net Income Common Stockholders |
| 222.66M | 163.99M | 174.14M | 353.83M | 482.36M | -125.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.09B | 891.91M | 458.01M | 857.75M | 932.07M | 833.84M | Total Assets |
| 6.66B | 6.60B | 6.43B | 6.63B | 6.09B | 5.70B | Total Debt |
| 3.23B | 3.23B | 3.01B | 3.02B | 2.88B | 3.09B | Net Debt |
| 2.14B | 2.34B | 2.56B | 2.16B | 1.94B | 2.25B | Total Liabilities |
| 4.11B | 4.22B | 4.25B | 4.20B | 4.13B | 4.25B | Stockholders Equity |
| 2.25B | 2.09B | 1.93B | 2.11B | 1.68B | 1.15B |
| Cash Flow | Free Cash Flow | ||||
| 795.25M | 563.11M | 211.82M | 400.38M | 748.49M | 119.27M | Operating Cash Flow |
| 969.43M | 737.18M | 660.27M | 977.76M | 993.93M | 461.08M | Investing Cash Flow |
| -82.73M | -99.74M | -508.58M | -553.14M | -253.05M | -278.06M | Financing Cash Flow |
| -206.33M | -203.55M | -551.42M | -508.53M | -643.09M | 234.06M |
Methanex Technical Analysis
Positive
45.60
Price Trends
43.80
Positive
53.36
Negative
57.08
Negative
Market Momentum
0.19
Negative
60.67
Neutral
79.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MX, the sentiment is Positive. The current price of 45.6 is below the 20-day moving average (MA) of 45.86, above the 50-day MA of 43.80, and below the 200-day MA of 57.08, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 60.67 is Neutral, neither overbought nor oversold. The STOCH value of 79.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MX.
Methanex Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Performance Comparison
TSE:MX
Methanex
47.88
-20.72
-30.21%
TSE:CHE.UN
Chemtrade Logistics
11.07
2.50
29.17%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.